Minister of State for Railways Manoj Sinha has informed the Lok Sabha recently about the private sector participation in Railway Track construction.
Indian Railways has issued a Participative Policy in December 2012 envisaging four different models through which private firms can participate for construction of Railway lines. These models are - Non Governmental Railway (NGR), Joint Venture (JV), Build Operate & Transfer (BOT) and Annuity. Under these models, the concessionaire is responsible for financing, constructing and timely completion of the project. Such concessions are different from Engineering, Procurement and Construction (EPC) contracts.
As on 01.04.2016, Indian Railways have 458 major ongoing projects including 166 New Line, 39 Gauge Conversion and 253 Doubling projects, that need about Rs.3.86 lakh crore for their completion.
The construction cost is borne by the concessionaire. The concessionaire gets compensated by means of pre-agreed percentage of apportioned freight revenue in NGR, JV and BOT models or fixed quarterly annuity payments under Annuity Model after commissioning of the projects during the concession period.